DA passes resolution on AGOA in Western Cape Provincial Parliament

1 June 2023

The Democratic Alliance has passed a binding resolution in the Western Cape Provincial Parliament today, confirming the province’s commitment to securing South Africa’s inclusion in the African Growth and Opportunity Act (AGOA).

Through this resolution, the Western Cape Provincial Parliament has committed to:

a) Reaffirming the USA and Western Cape friendship and important economic and trade ties;

b) Supporting the renewal of AGOA in 2025;

c) Calling on the President to take urgent diplomatic action by engaging with the US on ensuring SA's inclusion in AGOA once again;

d) Calling on the Minister of the Department of Trade, Industry and Competition to support trade relations on behalf of the Western Cape in making every effort to negotiate in good faith towards the renewal of AGOA; and

e) Emphasising strong bilateral ties with the US and commits to strengthening these ties.

We are sending a clear message that the ANC-led National Government does not speak for the people of the Western Cape in their shameful support of Russia’s illegal war. It is ultimately our residents that will bear the brunt of the decreased economic activity that will result from a lack of AGOA access.

This also comes amid a serious warning from the South African Reserve Bank that the ANC’s stance on Russia could lead to sanctions and exclusion from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system.

At present, over 90% of South Africa's international payments flow seamlessly through SWIFT, including AGOA related trade. However, should our country be banned from this vital system, the consequences would be nothing short of catastrophic.

This would harm our province’s major export industries, such as agriculture, tourism, and technology, which rely on SWIFT to conduct transactions and receive payments. These industries are key drivers of economic growth and job creation in the Western Cape. R110.49 billion worth of exports and R99.96 billion worth of imports were processed via the Port of Cape Town in 2021, totalling R210.45 billion.

Our ability to conduct essential trade and investment flows would be severely compromised if excluded from SWIFT, rendering it impossible to finance crucial transactions and hampering our capacity to receive payments from correspondent banks in dollars. Such a situation would result in irreparable damage to our relationships with key trading partners, risking the loss of invaluable preferential trade access.

The DA demands that the ANC-led government wake up to the magnitude of the impending crisis and urgently re-evaluate its stance on Russia's invasion of Ukraine. South Africa cannot afford to be excluded from AGOA and the international financial system, as that would bring about economic devastation and diplomatic isolation.

Issued by Cayla Murray, DA Western Cape Spokesperson on Finance, Economic Opportunities and Tourism, 1 June 2023